Should I get my Real estate license

Question

Hi everyone,

I have always said I do NOT want to be a realtor. I don't want to spend my time showing people houses. I heard listing is way better but you cant start with that. I tried getting into wholesaling because you don't need a license and I feel like you can make a greater profit than the realtor commission fee. However wholesaling is difficult and time consuming and I'm getting nowhere.

My uncle was a realtor and he keeps telling me that by taking the course I will learn a lot that will help me in all aspects of real estate and i will also meet and expand my network more than just going to REIA meetings once in awhile. I am interested in the course and learning more but not interested in being a realtor but I am interested in expanding my network in the real estate world and gaining more capital than my current 9-5.

Maybe theres other benefits im unaware of when getting my license? What should I do?

Vaibhav Puranik · Answer

In my opinion, you don't need to be a realtor, especially if you are not interested in doing that as a business. What your uncle says has some point, but not as much to move a needle. I deal with real estate investors every day and almost none of them have a realtor's license. They have people who are their trusted realtors when needed. When you choose to do something, you are also choosing to not do something. You need to identify what will get replaced because you spent time in becoming a realtor. If you are doing nothing and have a lot of time, then sure, become a realtor. But usually entrepreneurial people have more things to do and less time. In that case they must choose things wisely what they are going to do.

Cheryl Schuck · Answer

IMO, the real estate class and test does NOT teach you anything about real world real estate. You learn about real estate by being in it.

If you were to get licensed, keep in mind all of the costs that come out of YOUR pocket.  You do not get ANY financial assistance from your broker. Real estate is a business, not a job.

You need to pay for your class, your license, your board membership, mls membership, key access, and any marketing that you do in order to become a realtor.

Now, you need to join a brokerage to hang your license. You must make sure that you pick a home that will allow you to do "off market" work. Most  want all deals to go through the house so you have to find an investor friendly outfit where you can do both.

I always say knowledge allows you to make the best choices. I hope this helped.

Seth McGathey · Answer

I am a Realtor that became a Realtor because I thought it would just improve my ability to buy deals cheaper and faster and that I could maybe make some money here and there helping family and friends as needed. I do not regret becoming one because I enjoy it and am good at it and have found my niche in helping other investors like myself. But understand that it is not free, it is not easy, and you really don't get much from the courses.

As someone who invested for 5 years before getting my licenses, I learned very little from the Realtor courses besides how to fill out the contracts and how to avoid breaking the law as a Realtor. (Mostly things that wouldn't even be against the law if I just wasn't a Realtor).

Also, depending on your state and the brokerage you hang your license under, it can be as much as $2000 a year to hold your license. Meaning you likely need to do at least one deal a year to break even on the savings from your commission.

And a common misconception is that once you are an agent, people will just ask you to be their agent. But in reality, a majority of an agents time (especially new agents) is spent building their client base and marketing.

My recommendation is do not get your licenses based on your original post. The two exceptions I would give where it might make sense. 1. You plan to consitently do 2+ deals a year or at least one expensive one every year. 2. You plan to be a real Realtor and commit yourself to really working at building a client base. (or a combination of both 1 and 2).

Whatever you decide, best of luck on your efforts!

Richard F. · Answer

FYI, Realtor is a registered trademark that applies only to licensed real estate Agents that are also members of the National Association of Realtors (NAR). States issue Real Estate licenses, in most cases, initially you obtain a Sales license, some call it a Sales Associate or use other names depending on the State. Regardless of what they call it, you are just a Real Estate Agent, until you join the NAR, and become a Realtor Associate. You take significant additional training to be able to apply for a Broker's license. Assuming that you are already became an Agent and joined as a member of NAR, you are now a Realtor. If you or the company you work for is not a member of the NAR, you are just a Broker. Usually, Appraisers are licensed, as are Agents that specialize in Commercial Properties. They usually are NOT members of the NAR, but are still licensed as either a Sales agent or Broker, depending on requirements of the State and company they work for. Brokers and Realtors can have Agents working under them, but also typically the Business itself must be properly registered and obtain a Real Estate Business license. You can have a Broker's license but still work for a company operated by another Broker. Often the second Broker might actually be Broker in Charge of s second office location...but, they may just stick with doing sales.

Who cares, right? Well, it is usually the membership in the NAR that gets you the access to local MLS and standardized forms. There is a significant annual cost for that membership. The membership requires some Continuing Education classes, usually every other year, in addition to the requirements of the individual State for even more extensive CE classes just to keep your license active. The NAR also imposes a lengthy Code of Ethics on its members, which provides an avenue for dissatisfied Clients or Agents to seek remedy. Both the State and the NAR include Law Update classes to keep active agents up to date on State and Federal legislation that affects their field.

The bricks and mortar business has overhead to pay, including commercial liability, workers comp, errors and omissions insurance, plus comp fire/theft insurance for their premises. Many also require a Bond. When you work for one of these companies YOU are a liability that they must account for. If you misrepresent, or break a law, or coerce someone to do a deal, the entire company is at risk, so they have every right and obligation to make sure you pay your way, either with actual production or by paying "desk" fees. And to be clear, you usually are not free to do whatever you want. The Broker must approve your strategy/plans, and ultimately IS responsible for your RE related words and actions, legally.

A comment was made by another poster in this thread that many things he does would be legal if he were not licensed. True. There is often no consequence to non-agents for lying either straight up or by omission. Beyond that, the State defines what "real estate activities" require an agent to conduct them when a third party is being compensated for direct efforts to buy, sell, exchange, rent, or negotiate these real estate transactions.

As to the OP's question directly, if investing is your sole goal, you would be better served finding an excellent Realtor with MLS access that knows how to pull leads that potentially meet your investment criteria, and is willing to spend time showing/walking units with you...for a reasonable fee, at least until YOU have proven yourself and closed a two or three deals successfully and still have access to funding. Maybe you find a hobbyist Realtor and partner with them. They track their time and provide leads and other elements they are qualified for, while you provide the down payment funds, raw labor and construction coordination or oversight, you work out a partnership percentage based on what each contributes.

Alternately, you can work other positions at a RE company, from Admin Assistant to Accounting, Leasing Agent, and others depending on your background. PM companies are another option, you need a license in most states, but you can learn the entire rental cycle by working in a PM company, especially AS a PM. Originally I started in maintenance and worked up to PM and Association Management over my career. There are lots of opportunities, but none are flashy or high paying unless you are a top producer.

Gregory L Danyow · Answer

Yeah I'm new to investing too and was debating on getting the license... It doesn't look all that complicated and I think it would only help to be honest.

You DO have to work under a broker but you may be able to find one that is totally fine hanging your hat there. I don't know the cost behind all that of course and 2K sounds kinda nuts BUT if you are a people person, I don't see why you can't help people find houses while you're looking for deals yourself. I think just having access to all that extra info is super helpful with regard to the MLS. Maybe you'll find some sweet deal for someone while you were initially looking at it for yourself.... ya know?  That extra 3-6% could be the extra dough you need for a handsome downpayment on a future deal!

You'll have to spend some dough to get there but it's not like you need to get an associates or bachelors degree. I say go for it... what do you have to lose?

David Krulac · Answer

@Emily Croes  Get the license if you want, or not.  For me, I have a Real Estate Broker's license, but I started as a part time agent.  I bought my first house (of many) and needed to break my rental lease to move into my newly purchased house.  The proeprty manager was a Real Estate Broker, and he suggested that I get a license.  Took the 2 courses, passed the test the first time and got my license, and kept my full time job not in real estate. (I talk about that first purchse in Bigger Pockets Podcast #82.)  Initially I did a few deals here and there, often for other investors that I met at real estate meeting or conventions.  Since I was paid 100% commissions, you can work as much or as little as you want and are paid accordingly.  At one company I worked for there were 30 agents with licenses on the wall, many of them I never met and they did no business, no listings and no sales.  You work when you want and if you want.  For me I was glad I got my license and the immediate access to the MLS, but I can see how it not for everybody.

Scott Trench · Answer

I think you get your license after the first deal, if and only if you plan to buy at least several properties in the next few years.

Should I get my Real estate license

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